Public Transit

[ Barrels of Oil Equivalent Saved: ]

2.7M

[ Jobs Impact:]

Low

Medium

High

[ Budget Impact:]

Low

Medium

High

[ Conventional Pollutants Reduced: ]

CO

56,001 tons

NOx

2,019 tons

PM

-51

[ Megatons of GHG Reduced: ]

1.9

Overview

Roughly 80% of Americans live in cities or nearby suburban neighborhoods. Even the traditionally rural Midwest and South are catching up, with 76% of their respective populations now living in urban areas.1 These communities face higher traffic congestion, which results in longer commutes, lost economic opportunities, more pollution, and heightened public health problems. Increasing public transit could help reduce traffic in many of these areas, but federal transportation policy currently focuses overwhelmingly on highway development, often at the expense of other programs.2 As a result, almost half of Americans lack access to public transit.3 The federal government should rethink how public transit is financed, and adjust the policies that currently favor more roads over all other options.

Analysis

Spanning 47,000 miles of roadway, the interstate highway system is one of the Nation’s great post-war accomplishments.4 But rapid increases in the number of miles driven each year have led to highway congestion and required transportation planners to regularly choose between expanding capacity and properly maintaining existing roads.5 Americans now waste 5.5 billion hours, 2.9 billion gallons of gasoline, and $121 billion while stuck in traffic each year.7 Despite efficiency improvements, passenger vehicles remain a major source of pollution, emitting 31,000 tons of SO2, 3.5 million tons of NOx,8 and over a gigaton of CO2 equivalent9 —a full 15% of total U.S. greenhouse gas emissions.10

As more Americans move to cities and inner suburbs, expanding public transit options would reduce congestion, save commuters money, and help the U.S. become more energy independent.11 Expansion of transit systems12 already has helped open new communities to business opportunities, boosted property values,13 and added over $300 billion to GDP in the last decade.14 Today’s public transportation systems reduce CO2 by 37 megatons and avoid 4.2 billion gallons of gasoline use each year,15 which would otherwise cost travelers nearly $15 billion.16

Implementation

To expand transit in the U.S., the federal government should help local governments access private funding sources and use data-driven methods to prioritize limited budgets.

Help Local Governments Unlock Financing Options

The Federal Transit Administration (FTA) should offer on-site assistance for local governments exploring funding options for transit projects. Having access to transit finance specialists could encourage local governments to take advantage of complex but effective financing methods17 like “value capture”,18 public-private partnerships,19 and bond issuance.20 With a relatively small increase in funding for personnel, the FTA could offer full-time consulting to help interested parties compare available financing options and negotiate the most rewarding contracts possible for transit development.

Use Economic Analysis to Make Smarter Funding Decisions

A large number of state departments of transportation make little use of economic analysis to judge the merits of a project or where its benefits will be enjoyed.21 The U.S. Department of Transportation (DOT) should develop a standardized model for this purpose and provide assistance to states, municipalities, and local planning organizations in operating the model. Once it has been distributed, Congress should make the use of this DOT model a requirement in all applications for funding from competitive transportation programs.

Incorporate Economic Analysis When Determining Federal Cost Share

Federal funds generally provide 80% of the total cost of highway projects but only 50% of transit projects, with the remainder paid by state and/or local governments. This practice encourages states to spend their limited transportation dollars on highway projects.22 Instead of using an arbitrary 80% or 50% formula, the federal government should use standardized economic analysis to determine the regional benefits of a project and, subsequently, what the appropriate federal cost share of that project should be.

The number of miles of American transit systems grew rapidly from 2004 to 2009, particularly for light rail and commuter rail which increased by 24% and 10% respectively. Highway miles, in comparison, grew less than 2% during that same period. See United States, Department of Transportation, Research and Innovation Technology Administration, Bureau of Transportation Statistics, “Transportation System Mileage Within the United States: 2004–2009,” Table, Transportation Statistics Annual Report 2010, p. 39, 2011. Accessed March 18, 2013. Available at http://www.rita.dot.gov/bts/sites/rita.dot.gov.bts/files/publications/transportation_statistics_annual_report/2010/index.html.

Every dollar invested in transit capital adds $1.5 to GDP, and every dollar invested in transit operations adds $2.0 to GDP. From 2000 to 2009, $136 billion was invested in transit capital (Table 44) and $296 billion was invested in transit operations (Table 49). Net benefits for this decade therefore would be $68 billion from capital investment and $237 billion from operations investment, for a total of $305 billion. See Glen Weisbrod and Arlee Reno, “Economic Impact of Public Transportation Investment,” Report, Prepared for the American Public Transportation Association by Economic Development Research Group, Inc. and Cambridge Systematics, Inc., October 2009, p. 31. Accessed March 18, 2013. Available at: http://www.apta.com/resources/reportsandpublications/Documents/economic_impact_of_public_transportation_investment.pdf See also “Capital Expenses by Mode” and “Total Operating Expense by Mode,” Tables, 2012 Public Transportation Fact Book, Appendix A: Historical Tables, American Public Transportation Association, March 2012, pp. 60, 65. Accessed March 18, 2013. Available at: http://www.apta.com/resources/statistics/Documents/FactBook/2012-Fact-Book-Appendix-A.pdf.

Using average of weekly U.S. regular conventional retail gasoline prices for 2012. See United States, Department of Energy, Energy Information Administration, “Gasoline and Diesel Fuel Update,” Table. Accessed March 18, 2013. Available at: http://www.eia.gov/petroleum/gasdiesel/.

Robert Cervero et al, “Transit-Oriented Development in the United States: Experiences, Challenges, and Prospects,” Report, Transportation Research Board, pp. 41, 110. Accessed March 18, 2013. Available at: http://www.trb.org/Main/Blurbs/154989.aspx.

One rationale for this disparity is that the majority of benefits from transit projects are felt locally, so local funds should be used to pay for them. However, by reducing congestion on major highway corridors, transit can provide benefits at a statewide or regional scale, something that plenty of highway projects fail to accomplish. See “Making the Case for Transit: WMATA Regional Benefits of Transit,” Technical Report, Washington Metropolitan Area Transit Authority, November 2011, p.11. Accessed March 18, 2013. Available at: http://174.122.148.221/~ssti/2012/01/making-the-case-for-transit-wmata-regional-benefits-of-transit/; See also United States, Department of Transportation, Federal Highway Administration, and United States, Department of Housing and Urban Development, “The Land Use and Urban Development Impacts of Beltways,” Report, October 1980, pp. 113-114. Accessed March 18, 2013. Available at: http://archive.org/details/LandUseAndUrbanDevelopmentImpactsOfBeltways.

How to Use the PowerBook

The PowerBook is a menu of á la carte options, not a blueprint that requires every element to hold it together. It is designed to provide federal policymakers and regulators with a selection of policy ideas to help solve specific challenges in how our nation produces, transports, and consumes energy.

SECTORS

The PowerBook is divided into five economic sectors: power, transmission, buildings and efficiency, industry, and transportation. Each sector includes multiple components, which are specific elements of that sector that require some policy change. Components that impact multiple sectors, such as clean energy finance or regulatory reform, are included in a sixth cross-sector section.

COMPONENTS

Each component has three parts: a short overview, an analysis of the challenges and opportunities for energy, employment, and the environment, and an implementation section that outlines specific actions that Congress, the administration, or the independent regulatory agencies can take. The policy recommendations in the implementation section are intended to serve as frameworks for more detailed legislation or regulatory reform proposals.

The components in the PowerBook reflect the input from a broad group of business leaders, policymakers, analysts, and academics. We will update them regularly to add new policy ideas, revise existing proposals, and reflect progress made in Congress or through the regulatory process. We invite readers to provide us suggestions to build upon the proposals in our components or new policies we should consider adding. Please send us your comments via the contact page.

OUR ANALYSIS

The PowerBook provides both pragmatic ideas to move America toward cleaner energy and data showing the potential impacts that these policies could have on our energy systems and economy. By combining several datasets, from economy-wide to industry-specific, we have developed a basic methodology for each component to estimate the effects these policies would have on CO2, conventional pollutants, and domestic energy needs. While future, independent modeling will provide higher accuracy, the current metrics offer a general barometer of impact and a way to compare the effects of various components.